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EXHIBIT 10.45
MANUFACTURING AGREEMENT
This Manufacturing Agreement is made as of March 3, 1997 by
and among AccuMed International, Inc., a Delaware corporation ("AccuMed"),
Difco Laboratories Incorporated, a Wisconsin corporation ("SPD"), and Difco
Laboratories Incorporated, a Michigan corporation ("Difco Michigan") (SPD and
Difco Michigan) are sometimes referred to herein individually and collectively
as "Difco," as the context indicates).
WHEREAS, pursuant to the Asset Purchase Agreement between
AccuMed and Difco Microbiology Systems, Inc. ("MSD") dated as of the date
hereof (the "Asset Purchase Agreement"), AccuMed has acquired from MSD
substantially all of the assets pertaining to the ESP Culture System II as set
forth in the Asset Purchase Agreement (capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Asset Purchase
Agreement unless the context requires otherwise);
WHEREAS, the execution and delivery of this Agreement by the
parties hereto is an express condition precedent to AccuMed's obligations under
the Asset Purchase Agreement and the parties are executing and delivering this
Agreement in satisfaction of such condition precedent;
NOW, THEREFORE, based on the covenants and agreements set
forth herein and for other good and valuable consideration, the receipt, value
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties agree as follows:
Section 1. DEFINITIONS AND USAGE
1.1 Definitions. As used herein:
"Affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled by, or under common
control with such Person.
"Annual Maximum Price Increase" means a maximum price
increase in each year during the term of this Agreement as to a Product equal
to the percentage amount of the then applicable price (before the increase)
equal to the percentage by which the Producer Price Index for the region in
which Difco performs its primary manufacturing obligations hereunder with
respect to such Product (the "PPI") increased in relation to the PPI published
for the immediately preceding calendar year.
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"Base Media" means Difco's proprietary formula for
the following products:
Description
Septicemia Aerobic Media - for use in ESP 80A and 40A bottles
Septicemia Anaerobic Media - for use in ESP 80N and 40N bottles
Xxxxxxxxxxx 7H9 Broth - for use in ESP Myco bottles
"Base Media Components" means the following
ingredients of DCM which are produced by processes that are proprietary to
Difco:
("Component A") M-0122 Proteose Peptone #3
("Component B") X-0000 Xxxxxxxx
("Component C") O-0127 Yeast Extract
("Component D") X-0000 Xxxxxxxxxxx 7H9 Broth
("Component E") X-0000 Xxxxxxxx
"Bottle Disposable Products" means the following
products consisting of the bottle containing culture media, supplements or
inhibitors (in each case, which on the date hereof are as described in and
having the respective Functional Specifications set forth in Schedule 1 which
are the respective functional specifications defined in the applicable 510(k)
Notification):
80A Aerobic bottles for blood and sterile body fluid testing
7101-44-1
80N Anaerobic bottles for blood and sterile body fluid testing
7103-44-9
EZ Draw 40A Aerobic direct draw for blood and sterile body fluid testing
7105-44-7
EZ Draw 40N Anaerobic direct draw for blood and sterile body fluid testing
7107-44-5
ESP Myco For detection of Mycobacteria in respiratory, blood, stool,
tissue, sterile fluids, urine and wound specimens
7111-42-0
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ESP GS Myco growth supplement 7112-42-0
ESP Myco PVNA Myco antibiotic inhibitor 7113-42-0
"Confidential Information" means all material information
relating to the Bottle Disposable Products, including Technical Information
(but excluding any information relating to Base Media, DCM and/or the Base
Media Components), whether in Difco's possession on the date hereof or
subsequently transmitted in any manner by AccuMed to Difco, its employees or
representatives pursuant to this Agreement that is marked, designated or
described as confidential at the time of transmission (or thereafter if Difco
will not be prejudiced by the delay).
"DCM" means the xxxx of materials and recipe to produce the
following products which are required in Base Media:
Component No. Description
M - 6937 Septicemia Aerobic Media - for use
in ESP 80A and 40A bottles
M - 6938 Septicemia Anaerobic Media - for use
in ESP 80N and 40N bottles
0 - 0713 Xxxxxxxxxxx 7H9 Broth - for use in
ESP Myco bottles
"ESP Product Line" means the ESP Culture System II and
predecessors comprised of disposables, software, and instruments for the growth
and detection of microorganisms in blood cultures, sterile body fluids and
Mycobacteria samples in instruments referenced by model Nos. 128, 256 and 384
utilizing ESP intellectual property which was acquired by AccuMed pursuant to
the Asset Purchase Agreement.
"FDA" means the United States Food and Drug Administration.
"Functional Specifications" means, with respect to a specified
Product, the applicable functional specifications therefor set forth on Schedule
1, as modified as provided herein.
"GMP" means the FDA's Good Manufacturing Practice regulations.
"Manufacturing Equipment" means that machinery and equipment
transferred to AccuMed by MSD pursuant to the Asset Purchase Agreement and
listed on Schedule 3.
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"Person" means any natural person, partnership,
corporation, association, limited liability partnership, limited liability
company, or other legal entity, and any government, political entity or other
sovereign.
"Products" means Bottle Disposable Products, DCM and
Base Media Components, as the context relates and shall include the RISE and
PZA antibiotic kits, new Myco inhibitors and new fungal additives currently in
development by AccuMed provided that Difco and AccuMed shall first have entered
into an amendment to this Agreement adding such products, setting the pricing
therefor (which in the case of RISE and PZA antibiotic kits shall be in
accordance with Schedule 5.7) and modifying the terms of this Agreement as
appropriate, each of the Parties agrees to negotiate in good faith to enter
into such amendment(s) upon the request of any Party.
"Technical Information" means (in each case whether
in electronic format or hard copy) all material know-how, trade secrets,
patents, processes, drawings, specifications, test methods, QA/QC Procedure
documents, bills of materials, bills of costs, and bills of supplies, GMP and
FDA inspection documents relating to the design, assembly, test or operation of
the Bottle Disposable Products in the possession of Difco on the date hereof or
revealed by AccuMed to Difco pursuant to the terms of this Agreement (but
excluding those pertaining to Base Media, DCM and Base Media Components).
"510(k) Notification" means a Pre-market Notification under
Section 510(k) of the Federal Food, Drug and Cosmetic Act).
1.2 References to a Person who is not a party hereto are
also references to its permitted assigns and permitted successors in interest
(by means of merger, consolidation or sale of all or substantially all the
assets of such Person or otherwise, as the case may be), and references to a
Person who is a party hereto are also references to its permitted assigns and
permitted successors in interest as provided in Section 17.
1.3 References to a document are to it as amended, waived
and otherwise modified as of the time in question and references to a statute
or other governmental rule are to it as amended and otherwise modified as of
the time in question (and references to any provision thereof shall include
references to any successor provision in effect as of the time in question).
1.4 References to Sections or to Schedules or Exhibits
are to sections hereof or schedules or exhibits hereto, unless the context
otherwise requires.
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1.5 The definitions set forth herein are equally
applicable both to the singular and plural forms and the feminine, masculine
and neuter forms of the terms defined.
1.6 The term "including" and correlative terms shall be
deemed to be followed by "without limitation" whether or not followed by such
words or words of like import.
1.7 The term "hereof" and similar terms refer to this
Agreement as a whole.
1.8 References to the "parties" are to the Difco and
AccuMed, unless the context otherwise requires.
1.9 The date on which any notice or other writing is
deemed given shall be determined pursuant to Section 16.
Section 2. GRANT OF RIGHTS TO MANUFACTURE BOTTLE
DISPOSABLE PRODUCTS; LEASE OF MANUFACTURING EQUIPMENT
2.1 Subject to the terms, conditions and
restrictions set forth herein, AccuMed hereby grants to Difco a royalty-free
non-exclusive license to use the Technical Information and Confidential
Information solely to manufacture the Bottle Disposable Products for exclusive
sale to AccuMed.
2.2 Nothing in this Agreement shall be construed
to grant Difco any right or license:
(i) With respect to any AccuMed product other than
the Bottle Disposable Products.
(ii) To manufacture any other product or device
incorporating the Technical Information and Confidential Information (or any
portion thereof) except as otherwise agreed in writing by AccuMed.
(iii) To use, sell, lease or otherwise dispose of the
Bottle Disposable Products manufactured under this Agreement to any Person
other than AccuMed.
(iv) To sublicense, assign or transfer its rights
under this Agreement except as provided in Section 17.
2.3 Difco agrees that it shall not use its rights
granted hereunder in any manner inconsistent with the provisions of this
Agreement and shall only use such rights to the extent and in the manner
required to perform its obligations hereunder.
Section 3. OWNERSHIP AND USE OF MANUFACTURING
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EQUIPMENT
3.1 The parties acknowledge that the
Manufacturing Equipment is the sole and exclusive property of AccuMed. The
only interest Difco shall have in the Manufacturing Equipment is that of a
lessee under this Agreement.
3.2 In exchange for Difco's agreement to
manufacture Products for AccuMed, AccuMed hereby leases to Difco, until the
Manufacturing Equipment is returned to AccuMed pursuant hereto and at no cost
to Difco (except as otherwise set forth herein), the right to use the
Manufacturing Equipment for the non-exclusive purpose of manufacturing Bottle
Disposable Products for AccuMed. After AccuMed's requirements for Bottle
Disposable Products have been fulfilled, Difco shall be allowed to use the
Manufacturing Equipment to manufacture other products only as follows: Difco
shall be entitled to manufacture (i) Difco products other than Bottle
Disposable Products for a Clinical Purpose (as defined in the License and
Non-competition Agreement) for direct sale by it or to a third-party
distributor and (ii) products (other than products which are competitive with
Bottle Disposable Products for a Clinical Purpose) for sale pursuant to
original equipment manufacturing agreements; Difco expressly acknowledges and
agrees that it is prohibited from using the Manufacturing Equipment for any
other purpose.
3.3 The parties do not intend this Agreement to
be a conditional sales agreement, chattel mortgage, or security agreement
within the meaning of any statute requiring filing or recordation.
Nevertheless, a financing statement or any document relating to this Agreement
may be filed or recorded for any such purpose so as to give notice to any
interested parties.
3.4 The Manufacturing Equipment currently is,
and shall remain in the possession of Difco until returned to AccuMed pursuant
hereto. AccuMed shall be entitled to have (i) one full-time employee
reasonably acceptable to Difco located during normal business hours and any and
all extended hours of operation upon the premises at which the Manufacturing
Equipment is located, and (ii) to have additional employees, agents and
representatives (including its independent auditors) enter such premises of
Difco upon reasonable notice and at reasonable times, to inspect and examine
the Manufacturing Equipment to ensure Difco's compliance with its obligations
under this Agreement. In each case, (i) the presence of such Persons on behalf
of AccuMed shall not interfere with Difco's use of the Manufacturing Equipment
or the operation of other Difco business on such premises, (ii) such Persons
shall at all times comply with all dress, security and other policies (in each
case, of which AccuMed has received notice) applicable to Difco personnel at
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such premises, (iii) AccuMed shall fully pay, indemnify and hold harmless Difco
and its officers, directors, employees, agents, invitees, affiliates,
successors or assigns (the "Difco Related Parties") from any losses, costs,
liabilities, settlement payments, awards, judgments, fines, penalties, damages
(including compensatory, consequential, incidental, special, punitive and
exemplary), expenses, or other charges (including reasonable attorney's fees)
("Losses") resulting from the presence of such Persons on such premises, and
(iv) prior to entering such premises, AccuMed shall have obtained from each
such Person and delivered to Difco a confidentiality agreement substantially in
the form of Exhibit A.
3.5 Difco shall notify AccuMed, as promptly as
practicable under the circumstances, of any accident connected with the
operation or malfunctioning of the Manufacturing Equipment, and include in such
notice the time, place, and nature of the accident, the damage caused to
property (including but not limited to the Manufacturing Equipment), the names
and addresses of persons injured and of witnesses, and such other information
reasonably requested by AccuMed within the possession of Difco as may be
pertinent to AccuMed's investigation of the accident. Difco shall also notify
AccuMed in writing within five business days after it first acquires knowledge
that any tax lien, attachment, or other judicial process shall attach to any
unit of the Manufacturing Equipment. On written request by AccuMed, Difco
shall give AccuMed written notice of the location of the Manufacturing
Equipment.
3.6 Difco shall obtain and maintain all
licensing and registration of the Manufacturing Equipment that is required by
law. AccuMed shall bear, pay and discharge when due, all license and
registration fees. If by law any such registration or license fee is billed to
Difco, AccuMed at its expense will do all things required to be done by Difco
in connection with the licensing or registration procedure, including payment
of any applicable fees.
3.7 AccuMed shall bear, pay and discharge when
due all assessments, personal property, sales and use taxes applied to the
lease of Manufacturing Equipment hereunder, and other taxes (excluding only any
tax on Difco's income or gross receipts) and governmental charges together with
any penalties or interest applicable to them, now or later imposed by any
state, federal or local governmental authority on the Manufacturing Equipment,
whether they be payable by or assessed to AccuMed or Difco. Difco shall
promptly forward to AccuMed any and all invoices, tax bills or other forms of
notification received by Difco relating to such assessments, and taxes. If
Difco is required to make or actually makes any such payments, AccuMed
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shall reimburse Difco within 15 business days following the date on which
documented written demand therefor is deemed given to AccuMed.
3.8 Subject to Section 4.3, Difco shall
undertake or cause to be performed the ordinary and necessary repairs and
maintenance to, and installation and operation of the Manufacturing Equipment
according to Difco's customary practices as to its own equipment; AccuMed shall
reimburse Difco for AccuMed's pro rata portion (based upon the relative volume
of use of the Manufacturing Equipment to manufacture (x) Products for AccuMed
and (y) products other than for AccuMed) of the costs related thereto within 15
business days following the date on which a reasonably documented request
therefor is deemed given to AccuMed.
3.9 Difco shall not make any material
alterations, additions, or improvements to the Manufacturing Equipment, and
without AccuMed's prior written consent Difco shall have no authority to incur
expenses for these purposes for AccuMed's account. All alterations or
improvements so approved shall become the property of AccuMed on expiration or
earlier termination of this Agreement.
3.10 At the expense of AccuMed, Difco shall affix
to and maintain on the Manufacturing Equipment all labels and plates provided
by AccuMed, or conspicuously xxxx the Manufacturing Equipment with such
language as AccuMed may reasonably request, to the effect that the
Manufacturing Equipment is owned by AccuMed and is subject to this Agreement.
3.11 Upon the expiration of Difco's obligation to
manufacture Bottle Disposable Products for AccuMed hereunder, Difco shall
return the Manufacturing Equipment to AccuMed in generally the same condition
as of the date hereof, reasonable wear and tear excepted. The Manufacturing
Equipment shall be surrendered by Difco, at the sole cost and expense of
AccuMed, by loading the Manufacturing Equipment on board any carrier selected
by AccuMed and shipping it as directed by AccuMed, freight collect. At such
time, Difco shall also deliver to AccuMed all reasonably available material
documentation and records pertaining to (i) repair and maintenance of the
Manufacturing Equipment, (ii) manufacturing costs of Bottle Disposable Products
and (iii) suppliers of raw materials and components of Bottle Disposable
Products. Difco shall be entitled to retain copies of such documentation only
(1) to the extent that it believes in good faith that it is legally required to
retain copies or (2) if such documentation relates (or is useful to Difco) in
connection with exercising its rights under the License and Non-competition
Agreement. AccuMed hereby covenants to retain copies of such
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documentation for a reasonable time and to make such documentation available to
Difco, at Difco's expense, should Difco reasonably require such documentation
in connection with a threatened or pending Claim or investigation or other
action of a Governmental Authority or otherwise and to give Difco at least 30
days' notice of AccuMed's intention to no longer retain copies thereof, in
which case AccuMed shall deliver the same to Difco, at Difco's expense, if
Difco shall so request within such 30-day period.
Section 4. INSURANCE, LOSS, AND DAMAGE TO EQUIPMENT.
4.1 AccuMed, at its own expense, shall not later
than the date hereof procure and maintain physical damage insurance on the
Manufacturing Equipment and bodily injury and property damage insurance in the
amount that it deems commercially reasonable. AccuMed's obligation to maintain
insurance pursuant to this Section 4.1 shall terminate when the Manufacturing
Equipment is delivered to AccuMed pursuant hereto. All such insurance shall
(i) be in a form and with companies approved by Difco (such approval not to be
unreasonably withheld), (ii) name AccuMed as owner of the Manufacturing
Equipment and as loss payee under the physical damage coverage, and (iii) name
Difco as additional insured under the bodily and property damage injury
coverage. Each insurer shall agree, by endorsement on the policies it issues
or by independent instrument furnished to Difco, that it will give Difco 30
days written notice before the policy in question shall be altered or canceled.
Each such policy of insurance shall provide that if AccuMed should fail to
maintain such insurance, Difco shall have the right, but shall not be
obligated, to effect such insurance for the account of Difco. Any expense so
incurred by Difco shall be payable by AccuMed to Difco within 15 business days
following the date on which written demand therefor is deemed given to AccuMed
by Difco. AccuMed shall furnish such evidence as Difco may reasonably require
of the insurance, the terms and conditions of the policy or policies, and the
expiration date.
4.2 The proceeds of any physical damage
insurance, obtained by AccuMed including fire, theft, extended coverage,
vandalism, malicious mischief, collision, or any other insurance covering risks
of loss to owners of interests in the Manufacturing Equipment shall be payable
solely to AccuMed.
4.3 AccuMed assumes the entire risk of loss from
damage, theft or destruction of the Manufacturing Equipment, whether or not
such damage, theft or destruction, shall relieve Difco or AccuMed of any
obligation under this Agreement, except if such damage, theft or destruction is
due to gross negligence
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on the part of Difco.
4.4 In the event of any loss from damage, theft
or destruction, AccuMed shall have the option to: (1) repair or restore the
Manufacturing Equipment to good condition and working order; or (2) replace the
Manufacturing Equipment with similar equipment in good repair, condition, and
working order.
Section 5. ORDERS; PRICING; CAPITAL EXPENDITURES;
QUALITY CONTROL
5.1 Purchase Order Forecasts. During the term
of this Agreement, AccuMed shall purchase its requirements for (i) each of the
Products other than Bottle Disposable Products from Difco Michigan, and Difco
Michigan shall supply such requirements, and (ii) Bottle Disposable Products
from SPD, and SPD shall supply such requirements, in each case pursuant to the
further terms of this Agreement. Set forth on Schedule 5.1 is a forecast by
calendar quarter of each of the Bottle Disposable Products required by AccuMed
during the term of this Agreement. At least 90 days prior to the last day of
each six-month forecast period, AccuMed shall provide Difco with an updated
forecast for the six-month period beginning on the last day of the then current
six-month forecast period. AccuMed shall be entitled to revise each
subsequent six-month forecast (via the forecast update provided) not more than
once and not later than the 90th day of the then current six-month forecast
period within a range from 5% fewer to up to 5% more of the amount of each
Product as set forth in the original forecast for such six-month period. If
AccuMed shall propose to Difco revisions to the forecasts outside of the
parameters described in the immediately preceding sentence, such revisions
shall not be binding upon Difco without its prior written consent, which
consent shall not be unreasonably withheld.
5.2 Minimum Commitments. AccuMed shall be
firmly committed to take and pay for the highest level of all forecasts
(subject to adjustment as permitted by Section 5.1). AccuMed's obligation
shall be to make such purchase on or prior to the last day of such applicable
forecast period, there being no minimum amounts which AccuMed shall be required
to purchase weekly, monthly or quarterly. Notwithstanding anything to the
contrary contained herein, Difco shall not be obligated to supply Products in
excess of the forecasts (as revised in accordance with Section 5.1) unless
Difco shall subsequently agree in writing, which agreement shall not be
unreasonably withheld.
5.3 Inventory. Difco shall maintain a stock of
inventory of Products sufficient at all times to meet the forecasted demand for
Products by AccuMed, all of which shall
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have cleared QC/QA Procedures (as defined below).
5.4 Purchase Orders; Shipments. Shipping dates
shall be mutually agreed upon in writing by Difco and AccuMed, but will
generally be determined by the purchase orders delivered by AccuMed to Difco
provided that they are consistent with the applicable forecast(s). Difco
acknowledges that AccuMed shall be entitled to issue multiple purchase orders
per week requiring shipment by Difco to multiple locations per week. Each
shipment hereunder shall be freight collect, F.O.B. point of origin, to each of
the domestic locations listed by AccuMed in a specified purchase order. All
goods shipped are to be identified and all risks of loss shall pass to AccuMed
F.O.B. point of origin. Difco reserves the right to make delivery in
installments. All such installment may be separately invoiced and shall be
paid for when due, without regard to subsequent deliveries. Delay in delivery
of any installment shall not relieve AccuMed of its obligation to accept
remaining deliveries. Difco will not have any responsibility for loss or
damage caused by common carrier. If there exists any evidence of damage to
materials or packaging material or of loss, the receipt to carrier should so
state, and claim shall be made by AccuMed against the carrier without delay.
5.5 Manufacturing Volume; Capital Expenditures.
Difco shall maintain sufficient facilities and employ a sufficient number of
direct personnel so as to effectively perform Difco's obligations set forth in
this Agreement, subject to the forecasted volume as set forth in Section 5.1
(as updated pursuant thereto) and to the manufacturing capacity of the
Manufacturing Equipment. Any and all capital expenditures (excluding
non-capacity capital expenditures such as maintenance and repair) required to
enable Difco to manufacture up to 5,500,000 units of Bottle Disposable Products
per year to fulfill AccuMed's requirements pursuant to this Agreement (which in
all cases shall be subject to the forecasts pursuant to this Agreement) shall
be borne by Difco. If AccuMed requests (which in all cases shall be subject to
the forecasts pursuant to this Agreement) that Difco manufacture Bottle
Disposable Products for AccuMed at a volume higher than 5,500,000 units during
a 12-month period, Difco shall use commercially reasonable efforts to meet such
requirements. If Difco reasonably believes it necessary or appropriate to make
capital improvements and modifications to so increase Difco's production
capacity, AccuMed shall reimburse Difco a pro rata portion of such additional
capital expenditures (based upon the relative volume of use of the
Manufacturing Equipment to manufacture (x) Bottle Disposable Products for
AccuMed and (y) products other than for AccuMed) of the costs related thereto
within 15 business days following the date on which a reasonably documented
request therefor is deemed given to AccuMed.
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5.6 Quality Control/ Quality Assurance;
Substitution.
(i) Difco shall maintain a level of quality in all
aspects of its operations regarding Products in compliance in all material
respects with the FDA's GMP regulations. Any material failure by Difco to
comply with GMP regulations or any other FDA or other governmental regulations
shall be deemed a material breach of this Agreement.
(ii) As noted in Schedule 1, Difco shall deliver to
AccuMed true and complete written copies of the current quality assurance/
quality control procedures of Difco for each Product within 30 days following
the date hereof, which shall be designated as Schedule 5.6 and shall become a
part of this Agreement (such procedures as modified from time to time as
contained in an amendment to Schedule 5.6(ii) are hereinafter referred to as
the "QA/QC Procedures").
(iii) If AccuMed receives a complaint asserting that
Product manufactured by Difco does not meet the Functional Specifications for
such Product, (1) AccuMed shall undertake commercially reasonable efforts to
determine the validity or invalidity of such complaint, (2) if AccuMed
validates such complaint, AccuMed shall forward the complaint information to
Difco, (3) with respect to each validated complaint received by Difco, Difco
shall promptly take such action as it determines in its reasonable judgment as
required by applicable governmental regulations and guidelines, if any. If a
Product manufactured by Difco for AccuMed fails to meet the applicable
Functional Specifications, Difco will use commercially reasonable efforts, at
the expense of AccuMed, to determine the cause of such failure and Difco shall
allow AccuMed to participate as appropriate in such investigation and
applications to resolve each identified problem. Difco reserves the right, in
its sole discretion, to remedy any claimed defect in the Products (including
replacing the Product) or to substitute other products therefor. If not
replaced by Difco as herein provided, Difco's sole and exclusive liability
shall be limited to the stated selling price of such defective Product. Difco
shall in no event by liable for AccuMed's lost profits or goodwill or any other
special, incidental or consequential damages.
(iv) If Difco desires to substitute other products
for Products, Difco shall provide AccuMed prior written notice thereof.
AccuMed shall be required to accept only such substitutes as (x) which shall
have passed Difco's quality control and quality assurance procedures for such
substitute products (which procedures shall be set forth as an addendum to
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Schedule 5.6), (y) and which shall be required to meet in all material respects
the applicable Functional Specifications for the Product for which it is
substituted.
5.7 Cost of Products. The initial prices for
each of the Products are set forth on Schedule 5.7. The prices may be adjusted
annually by Difco by notice to AccuMed but not in excess of the applicable
Annual Maximum Price Increase.
5.8 Taxes. To the extent legally permissible,
all present and future taxes and governmental charges imposed by any federal,
state, foreign or local governmental authority which Difco may be required to
pay or collect upon or with reference to the sale, purchase, transportation,
delivery, storage, use or consumption of the Bottle Disposable Products or
other Products (except income taxes) shall be added to the purchase price of
the Bottle Disposable Products or other Products, as the case may be, and shall
be paid by AccuMed to Difco within 15 business days following the date on which
written, reasonably documented demand therefor is deemed given by Difco to
AccuMed. AccuMed shall provide Difco with an appropriate and valid exemption
certificate. Upon receipt of said certificate Difco shall not add to the price
of goods shipped hereunder the amount of any sales or use tax applicable to the
sale of such goods to AccuMed. Under no circumstances shall there be added to
such price the amount of any general business tax, personal property tax, or
any tax levied upon Difco based on or measured by the net income of Difco.
AccuMed is solely liable and agrees to hold Difco harmless with respect to all
tariffs, duties, and excise or any other taxes or charges levied on goods
exported or imported by Difco or by AccuMed or its agents.
5.9 Payment. AccuMed shall pay to Difco the
purchase price of all goods shipped under this Agreement on the basis of 30
days net with a 1% discount if paid within 10 days of the date on which the
invoice is deemed given, regardless of whether AccuMed has inspected such goods
before payment is due. If the full amount is not paid when due, AccuMed agrees
to pay a 1% per month service charge with respect to such unpaid amounts until
paid-in-full. All payments by AccuMed under this Agreement shall be made by
AccuMed in full without set off, counterclaim, defense or other reduction
whatsoever.
Section 6. MODIFICATION OF MANUFACTURING SPECIFICATIONS;
OVERSIGHT.
6.1 As set forth on Schedule 1, Difco shall deliver
to AccuMed within 30 days following the date hereof true and complete copies of
the manufacturing specifications and processes for Bottle Disposable Products
as in effect on the date
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of such delivery (the "Initial Manufacturing Specifications"), which shall be
designated as Schedule 6.1 and shall become a part of this Agreement.
6.2 AccuMed shall have the ability to modify the
Initial Manufacturing Specifications (subject to FDA GMP) for Bottle Disposable
Products during the term of this Agreement) provided that Difco shall consent
thereto in writing (which consent shall not be unreasonably withheld and the
parties agree, however, that such consent may be conditioned upon a reasonably
documented change in pricing or modification of other terms of this Agreement).
At AccuMed's request, and subject to the foregoing, Difco shall use
commercially reasonable efforts to cooperate as provided in Section 6.3 with
AccuMed personnel, agents and/or representatives, to modify and adapt the
Initial Manufacturing Specifications as requested by AccuMed to manufacture
Bottle Disposable Products as revised or otherwise modified in accordance with
initial, revised or otherwise modified design, engineering and/or functional
specifications delivered to Difco by AccuMed.
6.3 Difco shall use commercially reasonable efforts
to make available appropriate personnel to cooperate with AccuMed as provided
in Section 6.2 including engineering, research and development and
manufacturing personnel.
6.4 All services provided by Difco pursuant to this
Section 6 shall be at AccuMed's expense. AccuMed shall reimburse Difco for the
actual time (based on salary or hourly wage rate, as the case may be) spent by
its personnel fulfilling Difco's obligations pursuant to this Section 6 and for
reasonably documented, related out-of-pocket expenses within 15 business days
following the date on which reasonably documented request therefor is deemed
given.
6.5 If Difco determines that the implementation of
the modifications to the Initial Manufacturing Specifications pursuant to this
Section 6 will increase the cost to manufacture Bottle Disposable Products, (i)
Difco shall only be required to implement such modifications if AccuMed agrees
to pay a reasonably documented price increase for such Bottle Disposable
Product, and (ii) Difco shall consider and implement, if commercially
reasonable, such methods as may be suggested by AccuMed to reduce the amount of
such cost increase.
Section 7. DELIVERY OF TECHNICAL/CONFIDENTIAL
INFORMATION Difco acknowledges that it currently possesses all relevant
Technical Information and Confidential Information necessary with respect to
the manufacture of the Bottle Disposable Products as manufactured and
configured on the date
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hereof. During the term of this Agreement, AccuMed will provide any revisions,
updates, or modifications to such Technical Information developed by AccuMed.
Such information shall be delivered to Difco in the form then utilized by
AccuMed, and when appropriately marked shall be received by Difco as
Confidential Information and will be subject to the restrictions on disclosure
set forth herein.
Section 8. WARRANTIES; LIMITATION OF LIABILITY
8.1 DIFCO SHALL NOT BE LIABLE FOR ANY INJURY OR
DAMAGE TO ACCUMED, OR TO ANY OF ACCUMED'S CUSTOMERS OR TO ANY OTHER PERSON
CAUSED DIRECTLY OR INDIRECTLY BY THE MANUFACTURE OF PRODUCTS BY DIFCO FOR
ACCUMED HEREUNDER OR BY THE USE, SALE, LEASE OR OTHER DISPOSITION OF ANY OF
PRODUCTS BY ACCUMED OR ITS CUSTOMERS OCCURRING EITHER BEFORE, DURING OR AFTER
THE TERM OF THIS AGREEMENT; PROVIDED FURTHER THAT IN NO EVENT SHALL DIFCO BE
LIABLE TO ACCUMED OR ANY OTHER PERSON FOR ANY LOSS OR INJURY TO EARNINGS,
PROFITS, OR GOODWILL, OR FOR ANY DIRECT, SPECIAL, INDIRECT, OR CONSEQUENTIAL
DAMAGES ARISING OUT OF DIFCO'S MANUFACTURE OF PRODUCTS FOR ACCUMED HEREUNDER,
AND ACCUMED AGREES TO INDEMNIFY DIFCO AND HOLD IT HARMLESS WITH RESPECT TO THE
SAME.
8.2 DIFCO WARRANTS EXCLUSIVELY TO ACCUMED THAT
ALL BOTTLE DISPOSABLE PRODUCTS, DCM AND BASE MEDIA COMPONENTS MANUFACTURED BY
IT HEREUNDER WILL BE FREE OF ALL DEFECTS IN WORKMANSHIP AND WILL MEET THEIR
APPLICABLE FUNCTIONAL SPECIFICATIONS.
8.3
(i) DIFCO MAKES ONLY THOSE WARRANTIES WHICH ARE
EXPRESSLY SET FORTH IN SECTION 8.2. DIFCO MAKES NO OTHER WARRANTIES EXPRESS OR
IMPLIED AS TO ANY PRODUCTS, LABOR OR MATERIALS AND IN PARTICULAR NO WARRANTIES
ARE MADE AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE ALL OF
WHICH ARE EXPRESSLY DISCLAIMED.
(ii) Difco's liability under this Agreement is
specifically limited to the stated selling price of the Products. Difco may,
at its option, replace or allow credit for any Products found defective but
expressly disclaims and is absolved from liability for direct, incidental or
consequential damages, loss or expenses resulting from use or nonuse of such
Products. AccuMed's remedies provided in this Section 8 are exclusive of all
others.
(iii) By the provisions of the warranty set forth in
Section 8.2, Difco's sole and exclusive obligation to repair or replace
Products found to be defective in workmanship pursuant
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to the terms of such warranty runs to AccuMed only. THIS IS NOT A CONSUMER
WARRANTY. In no event or circumstance shall anyone other than AccuMed be
considered to have any right, title or interest to assert any rights under this
warranty. Difco shall not assume any warranty obligations or liabilities other
than as expressly set forth herein, nor does AccuMed or any other Person have
any authority to grant any warranty or to assume any obligations or liabilities
whatsoever on behalf of Difco.
8.4 AccuMed shall indemnify, defend and hold
harmless Difco and the Difco Related Parties from, against and in respect of
any Losses arising out of, relating to, or in any way connected with any of the
following (including if arising out of the negligence of Difco) except to the
extent that the following arise out of the gross negligence or willful
misconduct of Difco:
(i) Any injury, death or damage to person or
property (real or personal) caused or contributed to by any Products supplied
by Difco to AccuMed under this Agreement.
(ii) Any product liability claim under any theory
whatsoever, including, but not limited to, breach of warranty, defect in
design, failure to warn, negligence, strict liability, violation of law or
otherwise relating to any Products supplied by Difco to AccuMed under this
Agreement.
(iii) The packaging, shipment, labelling, or other
characteristic of any Products supplied by Difco to AccuMed under this
Agreement not being in full compliance with all applicable laws.
Section 9. PROPRIETARY RIGHTS
9.1 Title to and Ownership of the Technical
Information and Confidential Information reside in AccuMed, and no portion of
such title or ownership is transferred to Difco by reason hereof.
9.2 Except as provided herein, Difco disclaims
any right or interest in the Technical Information and Confidential Information
and agrees that the Confidential Information and Technical Information are and
shall remain the sole and exclusive property of AccuMed.
Section 10. CONFIDENTIALITY
10.1 The obligations imposed by this Section 10 to
maintain and not disclose Technical Information and Confidential Information
shall continue during the term of this Agreement and shall survive termination
of this Agreement, except to the extent
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that such information can be shown to have been (i) in the public domain
through no fault of Difco or any such Affiliate or other Person, (ii) later
lawfully acquired by Difco or any such Affiliate, as the case may be, from a
third-party, or (iii) known to, or practiced by, such third-party if such
information was received by such third-party without an obligation of
confidentiality to a Party as to such information, or independently developed
by such third-party as of the date such third-party acquires, or is acquired
by, Difco or any of its Affiliates; provided that Difco and any such affiliate
may disclose such information to their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement so long as such Persons
are informed by Difco or such affiliate, as the case may be, of the
confidential nature of such information and are directed by Difco or such
affiliate, as the case may be, to treat such information confidentially. The
obligation of Difco and its Affiliates to hold any such information in
confidence shall be satisfied if they exercise the same care with respect to
such information as they would take to preserve the confidentiality of their
own similar information.
10.2 Subject to Section 10.1, at all times during
the term of this Agreement Difco shall refrain from disclosing any Technical
Information or Confidential Information to any third Person without prior
written consent from AccuMed and shall take all necessary and proper action to
preserve the secrecy and prevent disclosure of such Technical Information and
Confidential Information. The obligation of Difco and its Affiliates to hold
any such information in confidence shall be satisfied if they exercise the same
care with respect to such information as they would take to preserve the
confidentiality of their own similar information.
10.3 Difco shall only disclose Technical
Information and Confidential Information and make it available to its employees
and only then on a need-to-know basis and to the extent necessary to perform
its obligations hereunder. In furtherance of the foregoing Difco shall use the
same security procedures to prevent unauthorized access to Technical and
Confidential Information as it uses for its own confidential information.
Difco shall use commercially reasonable efforts to maintain a permanent list
identifying all persons having access to the Technical or Confidential
Information, which shall be available for inspection by AccuMed upon reasonable
notice. All such Difco personnel having access to Technical Information and
Confidential Information shall be advised of the terms of this Agreement and
the requirements of confidentiality, and Difco shall use reasonable efforts
(but which shall not include the payment of additional compensation or
benefits) to obtain from
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such employees an agreement to be bound by these requirements both individually
and as an employee of Difco.
10.4 To the extent reasonably practicable, Difco
shall appropriately identify and xxxx all reproductions, copies, extracts or
the like of any documents containing Technical or Confidential Information as
the "Property of AccuMed" and as "Confidential" before distributing the same to
its employees. Upon termination of this Agreement Difco shall return all such
reproductions, copies, extracts or the like to AccuMed or an officer of Difco
shall certify in writing as to their destruction. Difco shall not be permitted
to retain any copy of such Information, except only (1) to the extent that it
believes in god faith that it is legally required to retain copies or (2) if
such documentation relates (or is useful to Difco) in connection with
exercising its rights under the License and Non-competition Agreement. AccuMed
hereby covenants to retain copies of such documentation for a reasonable time
and to make such documentation available to Difco, at Difco's expense, should
Difco reasonably require such documentation in connection with a threatened or
pending Claim or investigation or other action of a Governmental Authority or
otherwise and to give Difco at least 30 days' notice of AccuMed's intention to
no longer retain copies thereof, in which case AccuMed shall deliver the same
to Difco, at Difco's expense, if Difco shall so request within such 30-day
period.
10.5 During the term of this Agreement Difco
shall not use any of the Technical Information or Confidential Information
except in connection with the manufacture of Bottle Disposable Products. After
the term of this Agreement, Difco shall cease using all Technical Information
and Confidential Information.
10.6 Difco shall be relieved from its obligations
pursuant to this Section 10, to the extent that it is compelled to disclose by
judicial or administrative process or by other requirements of law, provided
that Difco shall provide AccuMed notice thereof as promptly as practicable in
order to allow AccuMed to seek a protective order, and to the extent that such
information can be shown to have been (i) in the public domain through no fault
of Difco or any Affiliate thereof, (ii) later lawfully acquired by Difco or any
such Affiliate, as the case may be, from a third-party, or (iii) known to, or
practiced by, any third-party where such information was received by such
third-party without an obligation of confidentiality to a Party as to such
information or independently developed by any third-party as of the date such
third-party acquires, or is acquired by, Seller or any of its Affiliates.
Difco shall also be relieved of its obligation pursuant to this Section 10 to
the extent that it may
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disclose such information to its officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such Persons are informed by Difco or
such Affiliate, as the case may be, of the confidential nature of such
information and are directed by Difco or such Affiliate, as the case may be, to
treat such information confidentially. The obligation of Difco and its
Affiliates to hold any such information in confidence shall be satisfied if
they exercise the same care with respect to such information as they would take
to preserve the confidentiality of their own similar information.
Section 11. AccuMed Option to Purchase Shared
Manufacturing Equipment.
(i) Upon the effective date of the termination of
Difco's obligation to manufacture Bottle Disposable Products for AccuMed
pursuant hereto, AccuMed shall be entitled to purchase from Difco any or all of
the equipment listed on Schedule 11 (to the extent then owned by Difco) at a
purchase price equal to 50% of the fair market value thereof as determined by
an appraiser selected mutually by AccuMed and Difco, provided that AccuMed
shall have given to Difco (either concurrent with AccuMed's notice of
termination or as promptly as practicable following the date on which such
termination notice is deemed given to AccuMed by Difco (but in no event later
than 30 days thereafter), as the case may be) notice of intent to so purchase
such equipment. Such notice of intent shall not be revocable by AccuMed
without Difco's consent, such consent not to be unreasonably withheld. The
closing of the purchase of such equipment shall occur not later than the later
of (x) the date agreed upon in writing by AccuMed and Difco, (y) 180 days
following the date on which notice of termination of Difco's obligation to
manufacture Bottle Disposable Products hereunder is deemed given, and (z) five
business days following the date on which final determination of the purchase
price of such equipment is deemed given to AccuMed and Difco pursuant to
Section 11(ii).
(ii) As promptly as practicable, but no later than 30 days,
following the date on which such notice of intent is deemed given by AccuMed,
AccuMed shall propose an appraiser for Difco's approval. If Difco and AccuMed
are unable to agree upon an appraiser within 15 business days following the
date upon which such notice is deemed given by AccuMed to Difco, then each of
the parties shall be entitled to select its own appraiser and the fair market
value of such equipment shall be deemed to be the average of the value
established by such appraisers.
(iii) Any such equipment transferred by Difco to AccuMed
pursuant to this Section 11 shall be transferred on an
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"AS IS" and "WHERE IS" basis without any representation or warranty (except as
to good and marketable title to transfer such equipment).
(iv) Notwithstanding Section 11(i), Difco shall be entitled
to transfer, sell or otherwise dispose of some or all of such equipment prior
to receipt of a notice described in Section 11(i) from AccuMed, only if (1)
Difco shall have given AccuMed 30 days' prior notice of such intention and (2)
AccuMed shall not have given Difco notice of AccuMed's intention to purchase
such equipment pursuant to the other terms of this Section 11.
Section 12. TERM AND TERMINATION
12.1 The term of SPD's obligation to manufacture
and sell to AccuMed Bottle Disposable Products shall be the two-year period
beginning of the date hereof unless terminated sooner pursuant to the
provisions hereof.
12.2 The term of Difco Michigan's obligation to
manufacture and sell to AccuMed DCM shall be the five-year period beginning of
the date hereof, unless terminated sooner pursuant to the provisions hereof
(including Difco Michigan's right to terminate in its discretion following the
18-month anniversary of the date hereof pursuant to Section 12.7).
12.3 The term of Difco Michigan's obligation to
manufacture and sell to AccuMed Base Media Components shall be the ten-year
period beginning of the date hereof, unless terminated sooner pursuant to the
provisions hereof (including Difco Michigan's right to terminate in its
discretion following the 18-month anniversary of the date hereof pursuant to
Section 12.7).
12.4 AccuMed may, at its option, terminate this
entire Agreement, subject to Section 12.4(i)(3), in the event that:
(i) (1) If Difco shall breach or
otherwise fail to perform or observe any of its material obligations or
covenants to AccuMed hereunder, and any such breach is not cured (if capable of
cure) within 30 days from the date on which notice of breach is deemed given to
Difco by AccuMed, AccuMed shall be entitled to terminate this Agreement
effective as of such 30th day, except that if Difco (a) has promptly and
continually proceeded, and will continue to proceed in good faith to pursue
commercially reasonably actions to cure such breach, and (b) that, upon
reasonable request of AccuMed from time to time, Difco shall have given AccuMed
notice of Difco's progress toward obtaining such cure, then the period for cure
thereof shall be
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extended by additional 30-day period(s) not to exceed the following respective
aggregate maximum periods following the date on which notice of breach is
deemed given by AccuMed: (x) 90 days for breaches related to a failure to
supply a Product meeting the applicable Functional Specifications, and (y) 180
days as to other breaches. If such breach shall not have been cured by the
last day of such applicable period, the Agreement shall be terminated effective
upon such date.
(2) If such breach is incapable of
cure, termination pursuant to this Section 12.4(i) shall be effective
immediately upon the date on which notice of breach is deemed given.
(3) Termination pursuant to this
Section 12.4(i) shall be with respect to this Agreement in its entirety, except
if (x) such breach is related to a failure to supply a Product meeting the
applicable Functional Specifications, and (y) the applicable cure period
pursuant to Section 12.4(i)(x) shall have expired, this Agreement shall be
terminated only with respect to the Product which is the subject of such breach
and the provisions of this Agreement with respect to the remaining Products or
otherwise relating other than to such Product shall remain in full force and
effect.
(ii) At any time following the 18-month
anniversary of the date hereof, if AccuMed, in its sole discretion, determines
that it is in its best interest to terminate this Agreement, AccuMed may
terminate this Agreement on 180 days' prior written notice of termination to
Difco; such termination may be with respect to the entire Agreement or AccuMed
may elect to terminate as to one or more of the Products as specified in
AccuMed's termination notice to Difco, in which case, the provisions of this
Agreement with respect to the remaining Products (or otherwise relating other
than to the terminated Product) shall remain in full force and effect. If this
Agreement is terminated pursuant to this Section 12.4(ii), AccuMed shall
reimburse all reasonable, documented expenses incurred by Difco as a direct
result of such termination and shall take and pay for at Difco's cost all
finished goods, inventory, work-in-process, raw materials, and supplies.
(iii) As to Bottle Disposable Products, a
writ of attachment or execution is levied on the Manufacturing Equipment (while
in possession of Difco) and is not discharged within 120 days after that levy.
(iv) As to Bottle Disposable Products, Difco
attempts to sublet or lend all or any part of the Manufacturing Equipment
without AccuMed's prior written consent.
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12.5 In the event of the termination or expiration
of this Agreement as to Bottle Disposable Products, Difco shall immediately
cease and desist from in any way manufacturing, assembling, using, or selling
any of the Bottle Disposable Products or utilizing any Technical Information
and Confidential Information provided by AccuMed, and provide to AccuMed all of
the Bottle Disposable Products against payment therefor, and shall take and pay
for at Difco's cost all finished goods, inventory, work-in-process, raw
materials, and supplies, in each case that are in Difco's inventory.
12.6 Difco may, at its option, terminate its
obligation to manufacture and sell to AccuMed Products pursuant to this
Agreement upon the occurrence of any of the following.
(i) (1) If AccuMed shall breach or
otherwise fail to perform or observe any of its material obligations or
covenants to Difco hereunder, and any such breach is not cured (if capable of
cure) within 30 days from the date on which notice of breach is deemed given to
AccuMed by Difco, Difco shall be entitled to terminate this Agreement effective
as of such 30th day, except that if AccuMed (a) has promptly and continually
proceeded, and will continue to proceed in good faith to pursue commercially
reasonably actions to cure such breach, and (b) that, upon reasonable request
of Difco from time to time, AccuMed shall have given Difco notice of AccuMed's
progress toward obtaining such cure, then the period for cure thereof shall be
extended by additional 30-day period(s) not to exceed a maximum aggregate
period of 180 days following the date on which notice of such breach is deemed
given by Difco. If such breach shall not have been cured by the last day of
such applicable period, the Agreement shall be terminated effective upon such
date.
(2) If such breach is incapable of
cure, termination pursuant to this Section 12.6(i) shall be effective
immediately upon the date on which notice of breach is deemed given.
12.7 At any time following the 18-month
anniversary of the date hereof, if Difco, in its sole discretion, determines to
terminate this Agreement (including in the event it desires a price increase),
Difco may terminate this Agreement on 180 days' prior written notice of
termination to AccuMed, such termination may be with respect to the entire
Agreement or Difco may elect to terminate as to one or more of the Products as
specified in Difco's termination notice to AccuMed, in which case, the
provisions of this Agreement with respect to the remaining Products (or
otherwise relating other than to the terminated Product) shall remain in full
force and effect.
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12.8 This Agreement may be terminated immediately
by either party upon written notice to the other in upon any of the following
events:
(i) The other is adjudicated bankrupt or
insolvent by any court of competent jurisdiction.
(ii) A trustee or receiver is appointed for the
property of such other or any substantial proportion thereof in any proceeding
in a court of competent jurisdiction.
(iii) In the case of any proceeding in bankruptcy
or insolvency where the applicable bankruptcy or insolvency statutes and codes
permit the trustee, receiver (or similar person) or the bankrupt party to
reaffirm contracts, if the receiver (or similar party) or the bankrupt party
fails, within the time permitted by law, to affirm this Agreement, cure all
outstanding defaults and provide the other party hereto such adequate
assurances as may be necessary to ensure the bankrupt 's continued performance
under this Agreement.
(iv) Any assignment of this Agreement is made or
attempted in contravention of the provisions of Section 17, hereof.
12.9. Notwithstanding any termination of this
Agreement, in part or in its entirety, pursuant to this Section 12, each
obligation which by its nature is to be performed following such termination
shall survive such termination.
Section 13. GOVERNMENT REGULATIONS
13.1 At any time during the term of this
Agreement, AccuMed shall disclose information to be disclosed to Difco and
deliver products to be delivered to Difco hereunder only in compliance with any
Export Administration Regulations of the United States Department of Commerce
in effect from time to time. Difco agrees to abide by any limitation of
disclosure placed on information revealed to it hereunder, and by any
limitation of product deliveries which may be placed thereon as a result of
such regulations. AccuMed shall be solely responsible for complying with all
laws and regulations applicable to the export of the Bottle Disposable
Products. Difco shall provide AccuMed with all documentation and data within
its possession necessary or desirable for compliance with all of those
regulations. AccuMed agrees to indemnify and hold Difco harmless from any
liability arising from the failure of AccuMed to comply with such regulations,
or the provisions of this Section 13.1.
13.2 AccuMed shall be solely responsible for
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complying with all laws and regulations applicable to the exercise of its
rights and the performance of its obligations under this Agreement and agrees
to indemnify and hold Difco harmless from any liability arising from the
failure of AccuMed to comply with such regulations, or the provisions of this
Section 13.2.
Section 14. FORCE MAJEURE
14.1 If either party to this Agreement is totally
or partially prevented or delayed in the performance of any of its obligations
under this Agreement by force majeure and if such party gives written notice
thereof to the other party specifying the matters constituting force majeure
together with such evidence as it reasonably can give and specifying the period
for which it is estimated that such prevention or delay shall be excused from
the performance as from the date of such notice for so long as such cause or
delay shall continue.
14.2 For the purpose of this Agreement, the term
"force majeure" shall be deemed to include any cause affecting the performance
of this Agreement arising from or attributable to acts, events, omissions or
accidents beyond the reasonable control of the party to perform and in
particular but without limiting the generality thereof shall include strikes,
lock-outs or other industrial action, civil commotion, riot, invasion, war,
threat of or preparation for war, fire, explosion, storm, flood, earthquake,
subsidence, epidemic or other natural physical disaster, impossibility of the
use of railways, shipping, aircraft, motor transport, or other means of public
or private transport, accidents, delays in providing materials (in each case
other than as a result of a breach or defaults by a Party or an Affiliate
thereof), shortages in fuel or other materials, breakdowns of equipment, acts,
demands or requirements of any federal, state or local governmental authority.
14.3 As soon as practicable after such
notification the parties shall consult together to decide how if at all the
effects of the force majeure can be mitigated.
Section 15. DISPUTE RESOLUTION
15.1 Governing Choice of Law. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Michigan (without regard to the conflicts of law provisions thereof).
15.2 Injunctive Relief. Each of the parties
hereto acknowledges that in the event of a breach by any of them of any
material provision of this Agreement, the aggrieved party
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may be without an adequate remedy at law. Each of the parties therefore agrees
that in the event of such a breach hereof the aggrieved party may elect to
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach hereof. By
seeking or obtaining any such relief, the aggrieved party will not be precluded
from seeking or obtaining any other relief to which it may be entitled.
Notwithstanding Section 15.3, if either party seeks specific performance or any
other extraordinary or provisional relief including, but not limited to,
injunctive relief under this Agreement, then any such action shall not be
subject to arbitration, and each party agrees to submit to the jurisdiction of
the federal and/or state courts in the State of Michigan and waives any and all
objections to jurisdiction and venue that it may have under the laws or courts
of any state, the United States or court.
15.3 Arbitration. Except as otherwise provided in
this Section 15.3, Difco and AccuMed agree that any claim, controversy or
dispute arising out of or relating to this Agreement, the interpretation of any
of the provisions hereof, or the action or inaction of any party to this
Agreement shall be submitted to neutral, binding arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (or
any successor thereto) and the Federal Arbitration Act, 9 U.S.C.A. sections
1-14 shall apply. Any award or decision obtained from any such arbitration
proceeding shall be final and binding on the parties, and judgment upon any
award thus obtained may be entered in any court having jurisdiction thereof.
The arbitration shall be conducted in Livonia, Michigan (or such other location
in the State of Michigan as the Parties may agree).
Section 16. Notices. All notices given pursuant to this
Agreement shall be in writing and shall be made by hand- delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
overnight air courier guaranteeing next business day delivery to the relevant
address specified below. Except as otherwise provided in this Agreement, each
such notice shall be deemed given: at the time delivered by hand, if personally
delivered or mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and the next business day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next business day
delivery.
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If to AccuMed, to:
AccuMed International, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Chief Executive Officer
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
with a copy to:
AccuMed International, Inc.
0000 0xx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxx
General Counsel
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
If to Difco, to:
Difco Laboratories Incorporated
00000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Executive Vice President Finance and
Operations
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx Xxxxxxxx
Telecopy No.: (000) 000-0000
Confirmation No.: (000) 000-0000
or to such other address as such party may indicate by a notice delivered to
the other party hereto.
Section 17 Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. Each party may assign this
Agreement to any of its respective Affiliates or to any Person acquiring all or
substantially all of
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its respective assets provided that any such assignee shall first deliver to
the other party an agreement pursuant to which the assignee assumes all of the
assignor's obligations under this Agreement and agrees to be bound by all terms
and conditions of this Agreement and the assignor shall notwithstanding any
such assignment remain liable for all of its obligations hereunder. Nothing in
this Agreement, expressed or implied, is intended or shall be construed to
confer upon any Person other than the parties and successors and assigns
permitted by this Section 17 any right, remedy or claim under or by reason of
this Agreement, except that Section 3.4 and Section 8.4 shall be for the
benefit of and shall be enforceable by the Difco Related Parties.
Section 18 Entire Agreement. This Agreement and
the Schedules hereto together with the Asset Purchase Agreement, and the
Ancillary Agreements (as defined in the Asset Purchase Agreement) contain the
entire understanding of the parties with regard to the subject matter contained
herein and therein, and supersede all prior agreements and understandings
between the parties including expressly the Offer Term Sheet dated as of
November 25, 1996 and except for the Confidentiality Agreement (as defined in
the Asset Purchase Agreement). Notwithstanding anything to the contrary
contained herein, any action taken by Difco or any of its Affiliates under any
of the Ancillary Agreements (other than this Agreement) shall not constitute a
breach or default under this Agreement.
Section 19 Severability. Wherever possible,
each provision hereof shall be interpreted in such manner as to be effective
and valid under applicable law, but in case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such provision shall be ineffective to the
extent, but only to the extent, of such invalidity, illegality or
unenforceability without invalidating the remainder of such invalid, illegal or
unenforceable provision or provisions or any other provisions hereof, unless
such a construction would be unreasonable, in which case the parties will
negotiate in good faith to enter into appropriate amendments hereto.
Section 20 Amendments. This Agreement shall
not be amended, modified or supplemented except by a written instrument signed
by an authorized representative of each of the parties.
Section 21 Interpretation. Section headings
herein are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement. The
Schedules hereto shall be construed with and as an integral part of this
Agreement to the
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same extent as if they were set forth verbatim herein.
Section 22 Waivers. Any term or provision of
this Agreement may be waived, or the time for its performance may be extended,
by the party or parties entitled to the benefit thereof. Any such waiver shall
be validly and sufficiently authorized for the purposes of this Agreement if,
as to any party, it is authorized in writing by an authorized representative of
such party. The failure of any party to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the
right of any party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach.
Section 23 Relationship of Parties. The
relationship of AccuMed and Difco shall be solely that of licensor and licensee
or vendor and vendee, as the case may be. Nothing contained herein shall be
construed to imply a joint venture or other principal and agent relationship
between the parties, and neither party shall have any right, power or authority
to create any obligation, express or implied on behalf of the other.
Section 24 Execution in Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
considered an original instrument, and all of which taken together shall
constitute one and the same agreement, and shall become binding when one or
more counterparts have been signed by each of the parties hereto and delivered
to each of the parties.
Section 25 Purchase Orders and Invoices.
The use by Difco or AccuMed of any form of invoice, purchase order or similar
document shall be for convenience only in connection with the transactions
contemplated hereby. Any provisions thereof (whether the same are additional,
conflicting or different) other than quantity and price terms shall not be
deemed to be a part of this Agreement or effective as between the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
ACCUMED INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
President, Microbiology Division
DIFCO LABORATORIES, INCORPORATED,
a Michigan corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx, President
DIFCO LABORATORIES, INC.,
a Wisconsin corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx, President
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AMENDMENT NO 1.
TO
MANUFACTURING AGREEMENT
This Amendment No. 1 (this "Amendment") to the Manufacturing
Agreement dated March 3, 1997 (the "Manufacturing Agreement") is made as of
March 10, 1997 by and among AccuMed International, Inc., a Delaware corporation
("AccuMed"), Difco Laboratories Incorporated, a Wisconsin corporation ("SPD"),
and Difco Laboratories Incorporated, a Michigan corporation ("Difco Michigan")
(SPD and Difco Michigan are sometimes referred to herein individually and
collectively as "Difco," as the context indicates).
WHEREAS, AccuMed and Difco desire to amend the Manufacturing
Agreement pursuant and subject to the terms and conditions of this Amendment.
In consideration of these premises and of the mutual promises
contained in this Amendment and in the Manufacturing Agreement, and intending
to be legally bound, the parties hereby agree as follows:
1. Successors and Assigns.
Section 17 of the Manufacturing Agreement is hereby deleted in
its entirety and the following is hereby inserted in lieu thereof:
Section 17 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns. Each party may
assign this Agreement to any of its respective Affiliates or
to any Person acquiring all or substantially all of its
respective assets provided that any such assignee shall first
deliver to the other party an agreement pursuant to which the
assignee assumed all of the assignor's obligations under this
Agreement and agrees to be bound by all terms and conditions
of this Agreement and the assignor shall notwithstanding any
such assignment remain liable for all of its obligations
hereunder; provided however, notwithstanding anything to the
contrary in the Asset Purchase Agreement, that each of SPD and
Difco Michigan agree that as a condition precedent to the
consummation of a sale of (x) substantially all its respective
assets or (y) such assets as are necessary for it to
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perform its respective obligations hereunder, that such other
party shall be required to execute and deliver to AccuMed an
assumption instrument pursuant to which such other party shall
agree to be legally bound by the terms hereof in the place of
Difco SPD or Difco Michigan, as the case may be. Nothing in
this Agreement, expressed or implied, is intended or shall be
construed to confer upon any Person other than the parties and
successors and assignees permitted by this Section 17 any
right, remedy or claim under or by reason of this Agreement,
except that Section 3.4 and Section 8.4 shall be for the
benefit of and shall be enforceable by the Difco Related
Parties.
2. Effect of Amendment. Except as otherwise modified hereby, the
terms of the Manufacturing Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first written above.
ACCUMED INTERNATIONAL, INC.
By:/s/ Xxxxxxx X. Xxxxx
------------------------------------
Xxxxxxx X. Xxxxx
President, Microbiology Division
DIFCO LABORATORIES INCORPORATED,
a Michigan corporation
By:/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
DIFCO LABORATORIES INCORPORATED,
a Wisconsin corporation
By:/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx, President
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